Friday, 16 June 2017

Controller of bankrupt recycling fund breaks silence

SCOTTISH EXCLUSIVE by DOUG COLLIE
One of the businessmen who presided over a fund which was supposed to bankroll Scottish Borders Council's £21 million waste treatment plant has spoken for the first time since the debt-ridden investment firm went belly up almost twelve months ago.

But far from offering more than 3,200 investors in his worthless New Earth Recycling & Renewables [Infrastructure] plc or NERR an explanation or an apology - they face losses totalling in excess of £290 million - John Bourbon has branded an investigation into the fund's activities as "something of a witch hunt".

The NERR fund was part of Isle of Man based Premier Group which managed and controlled a range of investment vehicles all of which are either about to be dissolved or are teetering on the verge of insolvency. It is now the subject of a probe by the Isle of Man Financial Services Authority (IOMFSA).

Mr Bourbon, a former chief of the Manx financial regulator before joining the board of Premier Group, and his colleagues, collected tens of millions of pounds in fees from NERR and its associates before the Group also crashed late last year.

Between 2011 and 2015 NERR had the role of funder for the Scottish Borders project at Easter Langlee, Galashiels. But financial backing for the waste management plant never materialised, and since the collapse of the project in 2015 it has become clear that NERR strung SBC along with a variety of excuses.

As we reported recently, Premier Shareholders' Group (PSG), which represents some of the hundreds of investors who lost their savings in Premier's funds, has established that the NERR fund was the most lucrative in terms of fees earned for the parent company which was, in turn, controlled from the tax haven of British Virgin Islands.

In an interview with Manx-based journalist Adrian Darbyshire, of Isle of Man Today, Mr Bourbon addressed allegations of mis-selling and other dubious practices which have been levelled at his Group by PSG and others. A dossier of evidence running into many pages is due to be presented to members of Tynwald (the Manx Parliament) within a matter of weeks.

The dossier accuses Premier of paying large commissions to unqualified and unlicensed agents who then targeted pensioners by claiming the funds were 'low risk'. PSG goes on to allege that shareholders were trapped by punitive exit fees, often up to 30%, and they could not access their money after the funds suspended withdrawals.

But Mr Bourbon dismissed PSG's claims and told his interviewer it was unlikely that anyone with significant investments in his funds were unaware of the risk. All fees and charges were clearly set out in the documentation used to promote the funds, he explained.

He made the extraordinary claim that a greater number of people had made a profit from the New Earth fund which loaned cash for the development of waste plants in the UK before it was wound up by the Isle of Man regulators in July 2016. Those loans were made to New Earth Solutions, the contractors handed a multi-million pound contract by SBC. NES is also insolvent and in the process of being wound up.

A further 189 investors are believed to have lost £61 million in NERR's sister entity Eco Resources Fund which ploughed cash into bamboo plantations in Central America and South Africa.

Mr Bourbon is personally fighting moves by the Eco Resources Fund liquidator to have the fund wound up with an adjourned court hearing due to take place next month.

He told Isle of Man Today the fund retained the potential to produce returns for investors for years to come if it is refinanced.

"With the right liquidator, it would be possible to refinance the fund, pay off creditors and financial indebtedness by 2023 and be left with an asset which produces $25 million per annum for investors for the following 60 years", said Mr Bourbon.

Mr Darbyshire's article, which was published online today has already attracted many angry comments.

One writer declared: " Perhaps Mr Bourbon can explain why the Premier group appointed unqualified, unregulated and unlicensed 'agents' (calling them professional financial advisers) to sell experienced investor funds to inexperienced pensioners - some living alone aged over 80. These 'agents' vanished at the first sign of trouble, but Premier kept the money that they received and refused to hand it back. The PSG has absolutely NO record of Premier returning any money."